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The Coverage Gap

The Coverage Gap: Uninsured Poor Adults in States that
Do Not Expand Medicaid – An Update
Rachel Garfield and Anthony Damico
One of the major coverage provisions of the Affordable Care Act (ACA) is the expansion of Medicaid eligibility
to nearly all low-income individuals with incomes at or below 138 percent of poverty ($27,724 for a family of
three in 20151). This expansion fills in historical gaps in Medicaid eligibility for adults and was envisioned as
the vehicle for extending insurance coverage to low-income individuals, with premium tax credits for
Marketplace coverage serving as the vehicle for covering people with moderate incomes. While the Medicaid
expansion was intended to be national, the June 2012 Supreme Court ruling essentially made it optional for
states.
As of January 2016, 19 states were not expanding their programs. Medicaid eligibility for adults in states not
expanding their programs is quite limited: the
median income limit for parents in 2016 is just
44% of poverty, or an annual income of $8,840 a
year for a family of three, and in nearly all states
not expanding, childless adults remain ineligible.2
Further, because the ACA envisioned low-income
people receiving coverage through Medicaid, it
does not provide financial assistance to people
below poverty for other coverage options. As a
result, in states that do not expand Medicaid,
many adults fall into a “coverage gap” of having
incomes above Medicaid eligibility limits but
below the lower limit for Marketplace premium
tax credits (Figure 1).
This brief presents estimates of the number of people in non-expansion states who could have been reached by
Medicaid but instead fall into the coverage gap, describes who they are, and discusses the implications of them
being left out of ACA coverage expansions. An overview of the methodology underlying the analysis can be
found in the Methods box at the end of the report, and more detail is available in the Technical Appendices
available here.
Figure 1
Gap in Coverage for Adults in States that Do Not Expand
Medicaid under the ACA
as of October 2014
as of January 2016
44% FPL
$8,840 for parents
in a family of three
$11,770
for an individual
$47,080
for an individual
The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid – An Update
2
Nationally, nearly three million3 poor uninsured adults fall into the “coverage gap” that results from state
decisions not to expand Medicaid, meaning their income is above current Medicaid eligibility but below the
lower limit for Marketplace premium tax credits. These individuals would have been newly-eligible for
Medicaid had their state chosen to expand
coverage.
Adults left in the coverage gap due to current
state decisions not to expand Medicaid are spread
across the states not expanding their Medicaid
programs but are concentrated in states with the
largest uninsured populations. More than a
quarter of people in the coverage gap reside in
Texas, which has both a large uninsured
population and very limited Medicaid eligibility
(Figure 2). Twenty percent live in Florida, eleven
percent in Georgia, and eight percent in North
Carolina. There are no uninsured adults in the
coverage gap in Wisconsin because the state is
providing Medicaid eligibility to adults up to the
poverty level under a Medicaid waiver.
The geographic distribution of the population in the coverage gap reflects both population distribution and
regional variation in state take-up of the ACA Medicaid expansion. As a whole, more people—and in particular
more poor uninsured adults— reside in the South than in other regions.4 Further, the South has higher
uninsured rates and more limited Medicaid eligibility than other regions.5 Southern states also have
disproportionately opted not to expand their programs, and more than half (10 out of 19) of the states not
expanding Medicaid are in the South. These factors combined mean nearly 90% of people in the coverage gap
reside in the South (Figure 2).
The characteristics of the population that falls into the coverage gap largely mirror those of poor uninsured
adults. For example, because racial/ethnic minorities are more likely than White non-Hispanics to lack
insurance coverage and are more likely to live in families with low incomes, they are disproportionately
represented among poor uninsured adults and among people in the coverage gap. Nationally, 45% of uninsured
adults in the coverage gap are White non-Hispanics, 23% are Hispanic, and 28% are Black (Figure 3).
However, the race and ethnicity of people in the coverage gap also reflects differences in the racial/ethnic
composition between states moving forward with the Medicaid expansion and states not planning to expand.
Several states that have large Black populations (e.g., Florida, Georgia, and Texas) have not expanded Medicaid
under the ACA. As a result, Blacks account for a slightly higher share of people in the coverage gap compared to
Figure 2
TX
26%
FL
20%
GA
11%
NC
8%
Other
States that
Have Not
Expanded
Medicaid
35%
Note: Totals may not sum to 100% due to rounding.
Source: Kaiser Family Foundation analysis based on 2015 Medicaid eligibility levels updated to reflect state Medicaid expansion
decisions as of January 2016 and 2015 Current Population Survey data.
South
89%
Midwest
7%
Northeast
1%
West
3%
Distribution of Adults in the Coverage Gap, by State and
Region
Total = 2.9 Million in the Coverage Gap
Distribution By Geographic Region:
Distribution By State:
The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid – An Update
3
the total poor adult uninsured population. The racial/ethnic characteristics of the population in the coverage
gap vary widely by state, mirroring the underlying characteristics of the state population.
Nonelderly adults of all ages fall into the coverage gap (Figure 3). Notably, over half are middle-aged (age 35 to
54) or near elderly (age 55 to 64). Adults of these ages are likely to have increasing health needs, and research
has demonstrated that uninsured people in this
age range may leave health needs untreated until
they become eligible for Medicare at age 65.6
While half of people in the coverage gap report
that their health is excellent or very good, nearly
a fifth (18%) report that they are in fair or poor
health (Figure 3). These individuals have known
health problems that likely require medical
attention. Studies repeatedly demonstrate that
the uninsured are less likely than those with
insurance to receive preventive care and services
for major health conditions and chronic
diseases.7 When they do seek care, the uninsured
often face unaffordable medical bills.8
The characteristics of people in the coverage gap also reflect Medicaid program rules in states not expanding
their programs. Because non-disabled adults without dependent children are ineligible for Medicaid coverage
in most states not expanding Medicaid, regardless of their income, adults without dependent children account
for a disproportionate share of people in the coverage gap (76%) (Figure 4). Still, nearly a quarter (24%) of
people in the coverage gap are poor parents
whose income places them above Medicaid
eligibility levels. About a quarter of a million
uninsured children have a parent in the coverage
gap (data not shown). Research has found that
parent coverage in public programs is associated
with higher enrollment of eligible children,9 so
these children may be hard to reach if their
parents continue to be ineligible for coverage.
The share of people in the coverage gap who are
adults without dependent children (versus
parents) varies by state (see Table 1) due to
variation in current state eligibility. For example,
Maine covers all parents up to at least poverty, so
all people in the coverage gap in that state are
adults without dependent children.
Figure 3
White
45%
Black
28%
Hispanic
23%
Other
4%
19-24
years
24%
25-34
years
24%
35-54
years
35%
55-64
years
17%
Demographic Characteristics of Adults in the Coverage Gap
Total = 2.9 Million in the Coverage Gap
Distribution By
Age:
Distribution By
Race/Ethnicity:
Excellent
or Very
Good
50%
Good
32%
Fair or
Poor
18%
Distribution By
Health Status:
Note: Totals may not sum to 100% due to rounding.
Source: Kaiser Family Foundation analysis based on 2015 Medicaid eligibility levels updated to reflect state Medicaid expansion
decisions as of January 2016 and 2015 Current Population Survey data.
Figure 4
Parent
24%
Childless
Adult
76%
Parent Status and Gender of Adults in the Coverage Gap
Parent Status
Male
48%
Female
52%
Total = 2.9 Million in the Coverage Gap
Gender
Note: Totals may not sum to 100% due to rounding.
Source: Kaiser Family Foundation analysis based on 2015 Medicaid eligibility levels updated to reflect state Medicaid expansion
decisions as of January 2016 and 2015 Current Population Survey data.
The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid – An Update
4
Even though women are more likely than men to qualify for Medicaid in states not expanding their programs,
women account for slightly more than half (52%) of adults in the coverage gap (Figure 4). This pattern occurs
because women make up the majority of poor uninsured adults in states not expanding their programs.
The work status of people in the coverage gap
indicates that there are limited coverage options
available for people in this situation. More than
six in ten (62%) people in the coverage gap are in
a family with a worker, and half are working
themselves (Figure 5). While workers could
potentially have an offer of coverage through
their employer, nearly half of workers in the
coverage gap (48%) work for small firms (

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The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid – An Update January 2016

One of the major coverage provisions of the Affordable Care Act (ACA) is the expansion of Medicaid eligibility to nearly all low-income individuals with incomes at or below 138 percent of poverty ($27,724 for a family of three in 20151). This expansion fills in historical gaps in Medicaid eligibility for adults and was envisioned as the vehicle for extending insurance coverage to low-income individuals, with premium tax credits for Marketplace coverage serving as the vehicle for covering people with moderate incomes. While the Medicaid expansion was intended to be national, the June 2012 Supreme Court ruling essentially made it optional for states.

As of January 2016, 19 states were not expanding their programs. Medicaid eligibility for adults in states not expanding their programs is quite limited: the median income limit for parents in 2016 is just 44% of poverty, or an annual income of $8,840 a year for a family of three, and in nearly all states not expanding, childless adults remain ineligible.2 Further, because the ACA envisioned low-income people receiving coverage through Medicaid, it does not provide financial assistance to people below poverty for other coverage options. As a result, in states that do not expand Medicaid, many adults fall into a “coverage gap” of having incomes above Medicaid eligibility limits but below the lower limit for Marketplace premium tax credits. #ACA#Obamacare#Medicaid

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